Market demanding new perspective

Undoubtedly, the winds of change are whistling through just about every sector of marketing.

The result: new views and new ways of looking at communications strategies and the methods needed today to at least maintain an equilibrium, if not advance the sale of one’s product or service.

Viable alternative

Though not new, the application of premiums and other incentives to help boost sales and even support brand image is being reviewed as a viable alternative or supplement to traditional methods.

The hard fact leading to such a conclusion is that while economic recovery is moving, it is doing so in slow motion.

The government’s recent announcement that the recession is officially over must be taken with cautious optimism.

Not out of the woods

There remain many indicators that we are not out of the woods yet – job insecurity, declining exchange rates, a drop in housing starts, slow employment recovery, retail closures and bankruptcies.

None of these factors is diminishing at an encouraging rate.

When times are tough, the marketer and his support teams in the advertising and promotion business look to alternatives. One of them is incentives, a term currently owned by the ‘premiums and incentives’ industry.

But let’s not forget that the basic incentive applied day-in, day-out to promote the sale or enhance the image of a product or service is still persuasive presentation of the feature and benefits of that product or service. It’s called Communications 101.

When faced with diminishing returns on normal advertising investment, the wise marketer looks beyond tradition. He looks to alternatives such as direct marketing. Which leads us to review incentives in broader terms.

Added incentive

What we’re really dealing with here is added incentive. Added to what? To the traditional promise you make to your customer.

Consumers have been hit so hard by economic downturns that they know and appreciate real value and are more discriminating in seeking values than ever in the recent past.

A note on these concerns was published by Business Week (January ’91).

‘…what customers are demanding is the right combination of product quality, fair price and good service. Value means all that, but it’s also important for what it doesn’t mean.

‘It doesn’t mean high quality if it’s only available at even higher prices. It doesn’t necessarily mean cheap if cheap means bare-bones or low grade. It doesn’t mean prestige, if the prestige is viewed as snobbish or self-indulgent. Instead, `value’ is the new prestige’.

In a tough economy, your customer perceives many products and services as poor value. He and she are actively looking for something to help make a decision to purchase in the first place and then to make a choice between brands.

Regrettably, brand loyalty is history. Today, your customer needs reasons beyond the normal values offered by your product or service. It’s as simple as that.

What’s an incentive?

Enter, the added incentive. So what’s an incentive? An incentive is simply an added reason to buy. But it has to be relevant, offer true additional value and not be simply a gimmick.

An incentive is a tactical tool. To be used when needed. It is not a substitute for traditional advertising or the normal techniques of direct marketing.

Erode image

For those concerned that premiums and incentives will erode brand image and loyalty, consider that you can do the same damage with poorly conceived ads, commercials and direct mail.

When should you offer your customers an incentive? When your sales or communications objectives are not being met by traditional methods or are being threatened by competitors’ activities.

The same reason you elect to use direct marketing. The incentive, however, can give you the edge needed to nudge your customer into a purchase.

Don’t confuse the power of incentives to help sustain brand image and long-term loyalty. There simply is none. You live day-by-day on your ability to satisfy an increasingly skeptical public.

It means you need all the persuasive power you can muster. If you can’t embed extra values into your product or service, then the use of incentives is one of the ways to add it.

Inevitably the question is asked – what type or sort of incentive will work with my product or service?

The answer is never clear-cut. Frustrating as it is, it depends.

The fact remains, however, that whichever premium or incentive you choose, it must fit the personality of your brand.

Image

You’ve spent years and perhaps millions of dollars developing an image, a personality, a vision of your brand in the mind of your customer. Would you for a moment select an incentive that would alter that image? Not likely.

Needless to say, selection of an added value incentive should reflect the same attitude you display when planning your direct marketing.

Review your brand personality and your communication objectives, your competitors’ current tactics, the state of your market, your retailer or distribution network or your mailing lists, then search for a match, something that enhances your offering, while at the same time mirrors the image you’ve sought so long to establish and which, one presumes, is working at present.

Others

A word about how others have logically matched their product with an incentive.

Using the ‘Max’ logo, Maxwell House tied in hot coffee and a ‘puts the heat on winter’ theme with an offer of a mug, toque, scarf or turtleneck sweater, each appropriately imprinted.

Minute Rice offered a chance to win a microwave oven.

Tetley Tea packed its product in a 150th anniversary tea cannister.

Sweepstakes

Facelle Royale sponsored a sweepstakes for two Delta 88 Royale automobiles.

White Swan tissues commissioned a limited edition series of collector plates featuring the birds of North America.

Kodak tied its 1988 Olympics involvement with an offer to ‘win gold’.

It’s interesting to note that these offers were not made through normal advertising channels, but through direct mail, another note on the increasing activity in target marketing and the use of direct marketing techniques.

Thorough

Regardless of the item you select, it’s important to be as thorough about the strategy as you would with any advertising plan. By going through the same process of development to establish a theme and a message, the idea for the incentive will flow from the exercise.

The types of incentives in use today vary widely. The store of ideas is endless. It depends. On your imagination.

Peter Henderson is president and creative director of The Henderson Robb Group, a Toronto-based communications company.